This paper investigates the claim that colonial history has left an enduring imprint on Africa's institutional and economic development. The literature following Acemoglu, Johnson and Robinson (2001) and Sokoloff and Engerman (2000) maintains that different types of colonialism affected the institutional environment differently, and that path-dependence subsequently ensures that these institutional differences and their impact on economic performance are persistent over time. By tracing the impact of colonial institutions on contemporary institutions over time, I show that – in contrast to claims in this literature – the relevance of colonial legacies to institutional quality and to per capita income is rapidly disappearing in Africa. Differences in institutional quality or income are explained less and less by colonial legacy, while there is some evidence that precolonial social and geographical circumstances are becoming more important. I conclude that while colonialism has affected African institutional and economic development significantly, this impact is not persistent. Rather, the evidence suggests that colonialism has created a large but very temporary institutional shock, after which a long-run equilibrium is being restored.

The hypothesis that institutional factors affect real economic growth has received support in both the theoretical and empirical literature. Globalization has also, though not unanimously, been found to affect growth outcomes. Bridging the gap between the two strands of the literature, this paper investigates the existence and strength of the interaction between institutional quality and globalization on real economic growth using a panel dataset covering 82 countries and spanning 25 years (1986–2010). Dimensionality reduction techniques are employed to identify key components of ‘institutional quality’: the rule of law, civil liberties and political rights. The empirical results reveal that while ‘institutional quality’ robustly and positively affects growth, the direct effect of economic globalization is not significant and the interaction effects, perhaps as a consequence, are muted over the review period. Direct and interaction effects of institutional quality and economic globalization on growth are, however, observed for the sub-sample of developing countries.

Blockchains are a new digital technology that combines peer-to-peer network computing and cryptography to create an immutable decentralised public ledger. Where the ledger records money, a blockchain is a cryptocurrency, such as Bitcoin; but ledger entries can record any data structure, including property titles, identity and certification, contracts, and so on. We argue that the economics of blockchains extend beyond analysis of a new general purpose technology and its disruptive Schumpeterian consequences to the broader idea that blockchains are an institutional technology. We consider several examples of blockchain-based economic coordination and governance. We claim that blockchains are an instance of institutional evolution.

Institutions are the driving features of economic and human development. Together with other social structures they influence the trajectories of societal change. Such factors are however tightly connected and should not be analysed in isolation but considered as interdependent with each other. This study contributes to the understanding of interconnections among institutions and other structural factors by focusing on two features: the manifold nature of linkages and the possibility of relations being asymmetric. An analogy to symbiotic relationships, common in ecology, serves as inspiration for an innovative methodological strategy to empirically study multiple interconnections. Focusing on the Brazilian municipality level, the study includes 54 structural factors in a correlation network. Empirical results include the identification of centroids, meaning most connected factors, which tend to gain or lose importance at higher levels of municipal development; and the identification of positive asymmetric relationships between structural factors, which may inform on system dynamics.

This paper explores associations between disturbances and cooperative responses in a selection of irrigation associations from Spain. Transaction costs and collective action theories are used to characterize disturbances and responses. Disturbances are characterized by looking at the uncertainty they generate, their frequency, the distance of the transacting partners they affect, and their impact on asset-specific transactions. Responses are assessed based on the collective action tasks they involve and classified into coordination and cooperation responses. A qualitative comparative analysis confirms two pathways that are sufficient for the emergence of cooperation responses. The first path is congruent with transaction costs theory, and points to disturbances that are frequent and asset specific; the second path supports relational theory, and points to disturbances that emerge progressively from within the system. Other patterns include the tendency of irrigation associations to delegate to external entities when disturbances are external and occur frequently; and the adaptation of existing institutions when the disturbances are internal and progressive.

We examine brand building from the perspective of complex adaptive systems. Brand building is a neglected engine of capital formation, innovation and institutional change in market economies. The nature of brands and the service streams they generate have been construed too narrowly. Brands are capital: entrepreneurs use brands as market-making devices that create value and capture profit, while consumers use brands to derive psychic income and lifestyle benefits. Brands are building blocks that can be combined in production to fill perceived gaps in brand architectures and capital structures. These structures are themselves complex adaptive systems. In an era of digital technological platforms, complex generative networks are the institutional locus of brand creation and brand extensions. Innovation in brand building is a socially distributed, service-intensive and interpretive process; it entails combinatorial experiments in resource integration by heterogeneous and socially connected actors, such as entrepreneur-producers, end-users and distributors. Legal brand owners never have total control over their brands – customer networks often exercise substantial de facto control rights (economic property rights) over the use and transformation of brands. Both the entire branding system (as a form of organization) and individual iconic brands can crystallize into relatively stable institutions that orient and coordinate market behaviour.

Institutional reforms in developing countries often involve copying institutions from developed countries. Such institutional copying is likely to fail, if formal institutions alone are copied without the informal institutions on which they rest in the originating country. This paper investigates the role of human actors in copying informal institutions. At independence, all British African colonies imported the same institution intended to safeguard the political neutrality of their civil services. While the necessary formal provisions were copied into the constitutions of all African colonies, the extent to which they were put into practice varies. The paper investigates the connection between the variation in the legal practice and the presence of British colonial officers after independence. A natural experiment around compensation payments to British officers explains the variation in the number of officers who remained in service after independence. Interviews with retired officers suggest that the extended presence of British personnel promoted the acceptance of imported British institutions among local colleagues.

The paper builds an integrative framework of the moral dimensions of the employment relationship by linking the core specificities of the employment relationship, i.e. the meaningfulness of work, its relational components, the incompleteness of the labour contract and its authority character, to the four moral motives identified by the Moral Foundations Theory, namely care, fairness/reciprocity, in-group/loyalty and authority. We show that due acknowledgement of the moral dimensions of the employment relationship entails making institutional transformations, namely strengthening rather than discarding employment law and reforming corporate law. Recognizing these moral dimensions would epitomize a radical break with mainstream economics and neo-liberal thought.

This paper analyzes the determinants of network structure, as measured by hierarchy and monopolization, by examining various black market networks. We examine structures of networks on the Internet Dark Net (Virtual) and compare it to network structures of traditional black markets (Ground), using agent-based modeling. The purpose of modeling these two different types of illicit markets is to understand the network structure that emerges from the interactions of the agents in each environment. Traditional black markets are relatively hierarchical, with high degree and high betweenness. We compare the density and average length of the shortest path of the simulated Ground black market networks with our simulated Virtual network. We find that hierarchy and monopolization tendencies in networks are products of different transaction costs and information asymmetries. The Internet is an effective way to lower multiple aspects of network structure. We observe that the network structure surrounding the interactions in the Virtual black market is less hierarchical and slightly more monopolistic than the network structure of the Ground market.

This work empirically investigates the effect of the interaction between the rule of law and legal central bank independence (CBI) on price stability (the level of inflation and inflation volatility), employing a panel dataset that covers up to 124 countries over the period from 1970 to 2013. A new, largely complete legal CBI dataset, covering 182 countries was used for the work. The results indicate that the effect of legal CBI on price stability depends on the strength of the rule of law. Moreover, the results reveal that legal CBI has no significant effect on price stability when the rule of law is weak. The findings also show that 67% of advanced countries possess a rule of law that is strong enough to maintain price stability by increasing central bank autonomy, while only 4.5% of developing countries possess it.

Digital markets offer abundant free content but exhibit extreme concentration among content aggregation intermediaries. These characteristics are linked. Weak copyright environments select against stand-alone content-delivery structures and select for bundled aggregation structures in which free content for users promotes positively priced advertising and data-collection services for firms. Dominant intermediaries promote commoditization, and the reallocation of market rents from content producers to content aggregators, through litigation and free content distribution that weaken copyright protections. The potential net welfare effects raise concern. Network effects, compounded by weak inventory constraints, scale economies, and learning effects, promote winner-takes-all outcomes in the intermediary services market while weak copyright may generate output distortions in the content production market.

This paper offers an increasing returns model of the evolution of exchange institutions building on Smith's dictum that ‘the division of labor is limited by the extent of the market’. Exchange institutions are characterized by a tradeoff between fixed and marginal costs: the effort necessary to execute an exchange may be economized by up-front ‘investment’ in strategies to facilitate the publication and accounting of trading histories. Increases in the size of the exchange network select for higher-fixed-cost exchange institutions, beginning with autarky, through various intermediate stages, and finally to mass monetary exchange. By identifying the relevant fixed costs of money and its institutional substitutes across time, the paper both accounts for the persistence of pre-monetary exchange institutions, despite the ‘inevitability’ of monetary exchange that seems to be a feature of traditional models of the origin of money, and illuminates the forces driving the transition from one to another.

This paper provides a case study of online pirate communities who use peer-to-peer networks to share copyrighted material illegally. Early scholars of peer-to-peer networks posited the possibility of a total network collapse due to issues of free-riding. When these networks are used to distribute copyrighted material illegally, the increased risk of legal punishment adds a further disincentive to contribute. This paper uses Ostrom's (2005) framework to categorize the rules used in pirate communities to solve collective action problems, evidencing the applicability and robustness of Ostrom's framework for self-governance under less favorable conditions. Through the use of boundary, position, information, and payoff rules, pirate communities are able to mitigate free-riding in the network.

There is a tight historical connection between endemic labour scarcity and the rise of coercive labour market institutions in former African colonies. This paper explores how European mining companies in the Belgian Congo and Northern Rhodesia secured scarce supplies of African labour, by combining coercive labour recruitment practices with considerable investments in living standards. By reconstructing internationally comparable real wages, we show that copper mine workers lived at barebones subsistence in the 1910s–1920s, but experienced rapid welfare gains from the mid-1920s onwards, to become among the best paid manual labourers in Sub-Saharan Africa from the 1940s onwards. We investigate how labour stabilization programs raised welfare conditions of mining worker families (e.g., medical care, education, housing quality) in the Congo, and why these welfare programs were more hesitantly adopted in Northern Rhodesia. By showing how solutions to labour scarcity varied across space and time, we stress the need for dynamic conceptualizations of colonial institutions, as a counterweight to their oft supposed persistence in the historical economics literature.

To what extent do imposed institutions shape preferences? We consider this issue by comparing the market-versus-state attitudes of respondents from a capitalist country, Finland, and from an ex-communist group of Baltic countries, and by arguing that the period of communist rule can be viewed as an ‘experiment’ in institutional imposition. We find that, consistent with some earlier related work, citizens from ex-communist countries tend to be more supportive of state ownership than respondents from capitalist economies. However, they also favour increasing inequality and competition as the means to enhance incentives. We conclude that, in some important relevant dimensions, institutional imposition (which lasted for about 50 years) had a limited effect on preferences.

Can we explain barriers to adaptation of collective action to changes in the natural environment? One reason for adaptation is the impacts of climate change. Ample case study evidence shows that such adaptation is rarely a smooth process. However, generalisable patterns of how and why barriers arise remain scarce. The study adopts a collective action perspective and the archetypes approach in a meta-analysis of 26 selected publications to explain how barriers arise in specific conditions. Focusing on adaptation of water governance in river basins, the study finds 21 reappearing patterns. Less well-established patterns relate to water property rights, hydrological standards, adaptation externalities, non-climatological uncertainty and vertical coordination. Results further show how barriers impede collective action in specific ways. The paper precisely introduces the archetypes approach, and shows that reported problems in adapting collective action under climate change arise from attributes of actors and pre-existing institutions rather than biophysical characteristics.

Since the end of the shakeout following the bursting of the dot com bubble, we have seen substantial innovation in the institutions and organizational arrangements used to finance early-stage high growth technology companies. This paper will document the emergence of business accelerators, angel groups, micro venture capital funds and online equity crowdfunding platforms, and show the rapid growth in angel investing over this period. It will also document the corresponding movement away from traditional venture capital activity at the early stage of company development. The paper will explain how technological advance, specifically the decline in the cost of bringing a new software product to market, has driven this shift in the institutions of early-stage finance.

Institutions matter for economic growth. Thus, the leaders who help to develop institutions, and their ideas and beliefs, must play a central role in any narrative that seeks to explain such growth. This leads to the appearance of institutional entrepreneurs, who act in a given cultural and political environment. We focus on the problem of state building, where formal institutions designed by leaders must be consistent with a given society's existing informal institutions. We consider an analytical narrative focusing on the Chilean experience in the 19th century. This serves as an interesting quasi-natural experiment on the role of ideas, leaders, and institutions in the problem of economic growth and development.

The literature on the determinants of cross-country variation in financial system development identifies historical institutional factors, mostly rooted in colonial effects, as key causes. Using a sample of 39 African former European colonies for 2006–11, this paper investigates the extent to which the historical institutional determinants identified by legal origins, disease endowment, religion-based and ethnic fractionalisation theories explain current differences in financial system development across Africa. While most existing research focuses only on one financial system development dimension, namely financial system depth, this article considers also financial system access. The results do not support any of the above theories when depth measures are used, while three of them (legal origins, disease endowment and ethnic fractionalisation theories) are validated when using access measures. This suggests that in Africa financial system depth and access do not have common historical institutional determinants, pointing to the need for greater fine tuning of prevalent theories and empirical measures.

A rough balance of political power between monarchs and a militarized landed aristocracy characterized medieval Western Europe. Scholars have argued that this balance of power contributed to a tradition of limited government and constitutional bargaining. I argue that 5th- and 6th-century barbarian settlements created a foundation for this balance of power. The settlements provided barbarians with allotments of lands or taxes due from the lands. The allotments served to align the incentives of barbarian warriors and Roman landowners, and realign the incentives of barbarian warriors and their leadership elite. Barbarian military forces became decentralized and the warriors became political powerful shareholders of the realm.